Aurora Oil & Gas CORP

Aurora Oil & Gas CORP deregistered its securities, ending its obligation to file reports with the SEC.

listing compliance notice

On December 11, 2009 the bankruptcy court confirmed Aurora's reorganization plan, with the effective date expected around December 22, 2009. Existing common stock (103,282,788 shares) is cancelled and holders receive nothing, so shareholders are wiped out; first-lien lenders get $20M tranche A notes, $20M tranche B notes and 32M new preferred shares, second-lien lenders get 56M new class A common shares, and general unsecured creditors share $350,000 (Aurora) and $50,000 (Hudson). The company plans to file a Form 15 around the effective date and stop SEC reporting. This resolves the open question of how the Chapter 11 ends and what happens to existing shares. The filing also adds monthly operating reports through November 2009 and says some earlier July-September figures were revised.

bankruptcy or receivership

On July 12, 2009 Aurora and its subsidiary Hudson Pipeline & Processing filed for Chapter 11 bankruptcy in the Western District of Michigan, saying they could not agree a restructuring with the lenders. The filing is a default on the senior facility (about $70 million), second-lien loan (about $50 million), a Northwestern Bank mortgage loan (about $2.6 million) and a Fifth Third equipment lease, though lender remedies are stayed by the bankruptcy. The company continues operating as debtor-in-possession with Huron's Sanford Edlein as Chief Restructuring Officer and aims for a consensual plan; no treatment of existing shares is stated, so the outcome for shareholders is open.

bankruptcy or receivership

The second forbearance expired April 30, 2009, and Aurora signed a new forbearance and tolling agreement (as of May 1, 2009) with both the senior lenders (BNP) and second-lien lenders (D.E. Shaw Laminar) running to June 15, 2009. The earlier mortgages giving lenders liens on 100% of oil and gas properties stay in place, and the period for challenging them as preferential transfers under bankruptcy law is extended to June 15, 2009, which points to bankruptcy being considered (inference). The lenders' standstill is extended too; no restructuring deal is reported.

debt financing

Aurora Oil & Gas CORP's securities were notified for removal from listing and registration on its exchange.

listing compliance notice

On April 9, 2009 NYSE Amex told Aurora its financial condition was so impaired that it was questionable whether it could continue operations or meet its obligations as they come due. The board chose to voluntarily delist rather than submit a compliance plan, and the stock is to move to the OTC Bulletin Board, with the last NYSE day expected around May 6, 2009. For shareholders this means a less prominent trading venue; it follows the debt defaults of the prior year.

listing compliance notice

After a voluntary standstill since the October 2008 default notice, Aurora signed a new forbearance agreement with BNP on February 12, 2009, covering December 31, 2008 to April 30, 2009. Conditions include hiring a financial advisor, liens on 100% of oil and gas properties, lender approval for asset sales over $200,000, a restructuring plan by February 28, 2009, at least $4.0 million of liquidity, and deferring the February 24, 2009 second-lien interest payment. This extends the lender standstill on the defaults but with tighter terms; failing the conditions ends it.

debt financing

The June 2008 forbearance ran out on August 15, 2008 without a restructuring deal. BNP terminated the company's gas and interest rate swaps (about $2.2 million owed, due October 2, 2008, and not paid), and the company missed the first of three borrowing base deficiency payments (about $6.6 million). BNP and the second-lien agent Laminar (which replaced BNP as agent on the term loan in August 2008) issued default notices, raising interest by 2% to about 8.0% on the senior facility and about 15.5% on the term loan. Neither lender has yet demanded repayment or acted to enforce, though management acknowledges the loans are payable on notice. This continues the debt problems from June 2008 and is a clear worsening; no equity outcome is stated.

debt financing

Aurora disclosed that in August 2007 it took a $50 million second-lien term loan from BNP (up to $70 million) and its senior facility's borrowing base rose to $70 million. It then failed covenants (found April 29, 2008), and on June 6, 2008 BNP cut the borrowing base to $50 million, a potential shortfall of up to $20 million. On June 2, 2008 (signed June 12) BNP agreed to hold off enforcement on both loans until August 15, 2008 if Aurora meets reporting and mortgage conditions, and interest rates went up. This is a serious worsening of the debt position; no equity outcome is stated.

debt financing

On October 6, 2006 a wholly owned subsidiary, Bach Services & Manufacturing Company, signed and closed the purchase of the Bach businesses announced in July, including operating assets, intellectual property, some oil and gas assets and an office building, for cash and common stock (one-year lock-up). Five-year employment agreements were signed with Rob and Rick Bach. Price amounts and share counts are not given, so the dilution is unknown. This resolves the Bach thread.

material agreement

On July 10, 2006 Aurora signed a binding letter of intent to buy the assets of Bach Enterprises, certain Bach Energy assets and Kingsley Development, the oil and gas service company it has used in Michigan for several years. The price will be cash and stock (stock locked up one year), the principals Rob and Rick Bach get five-year employment agreements, and closing is expected within 90 days after due diligence. The price amount is not stated.

material agreement

the American Stock Exchange certified Aurora Oil & Gas CORP's securities for listing, clearing them to begin trading.

listing compliance notice

Aurora Antrim North closed its purchase of OIL's Hudson Project assets for about $27.5 million, lifting Aurora's working interests to 49%-96% in many fields, and Aurora replaced OIL as operator. It was funded in part by a new BNP Paribas credit line (initial $40 million, up to $100 million as assets become proved, but capped at $50 million without TCW consent or payoff), with TCW's debt moved to second place and the parent's Aurora stock pledged. TCW has $40 million drawn of $50 million. This resolves the Hudson purchase thread and the financing question; the filing says January 1 as the closing date, which looks like an error since the later amendment says January 31, 2006 (inference).

asset acquisition disposition

The two Indiana New Albany Shale deals (Wabash buyout and sale to New Albany-Indiana, LLC) closed on February 1, 2006. Aurora paid $11,840,000 from internal funds for 64,000 acres of Wabash leases, and received $10,500,000 from New Albany for half of a combined 95,000-acre position. Aurora and New Albany each now hold a 48.75% working interest, Aurora is operator, and New Albany has an 18-month option on a 50% interest in a further 50,000 acres. This resolves the Wabash/New Albany thread that was targeted for February 1.

asset acquisition disposition

On January 10, 2006 the Aurora Antrim North subsidiary agreed to buy joint-venture partner OIL's Hudson Township, Michigan Antrim assets for a base price of about $27.5 million (adjustable), with closing required by February 28, 2006; a $1 million deposit is paid and $500,000 more is due on each of Feb 1 and Feb 17 if not closed. The company would then hold 49% to 96% working interests in many fields. Separately, the company is replacing its auditor Williams & Webster with Rachlin Cohen & Holtz (Aurora's auditor) for the December 31, 2005 year, citing the merger and a changed fiscal year, with no disagreement stated.

auditor change

On December 8, 2005 the TCW credit facility, fully drawn at $30 million, was amended to raise the borrowing base to $50 million; $10 million of the extra amount was funded on December 13, 2005. This resolves the earlier open question about TCW availability and adds debt, with the company's press release saying the money is for Michigan Antrim development through the first quarter of 2006.

debt financing

Aurora agreed on October 13, 2005 to buy out Wabash Energy Partners' leases in Indiana's New Albany Shale joint venture and its 20% stake in Aurora Operating, L.L.C. On November 15 it agreed to sell a 48.75% working interest in those leases to New Albany-Indiana, LLC (owned by College Oak Investments and Rex Energy Operating), which also gets an 18-month option on a 50% interest in other Indiana acreage. Net effect per the filing: New Albany replaces Wabash as partner, Aurora's working interest rises from 17.5% to 48.75% and it becomes operator. Both closings are scheduled by February 1, 2006 and are subject to conditions.

material agreement

Cadence mailed an information statement, required because the board is changing after the merger, saying no shareholder vote is needed. It states about 21,861,327 Cadence shares were outstanding on October 28, 2005, rising to 59,373,693 once the up-to-37,512,366 merger shares are issued, so existing holders' stakes are cut roughly in proportion (for example Nathan Low from 16.03% to 8.47%, Crosby from 4.63% to 2.49%). Four more directors (Earl Young, Gary Myles, Richard Deneau, Ronald Huff) join eleven days after mailing; a 36-month voting agreement covering 22,740,830 shares sets a seven-person board, and irrevocable proxies over 10,102,286 shares name Deneau and Lori King. This continues the board changes in the Nov 4 8-K.

business combination

The Aurora Energy merger closed on October 31, 2005, resolving the long-pending S-4 and shareholder-approval threads (S-4 effective Sept 22, Aurora holders approved Oct 7). Aurora holders get 37,512,366 Cadence shares (2 per Aurora share), 10% held in escrow for six months; 10,497,328 shares are reserved for converted Aurora options and warrants. Aurora's management takes over (William Deneau as Chairman, President and CEO; Howard Crosby becomes Vice Chairman; Crosby and John Ryan resign as officers; Ryan, DeHekker and Christian resign as directors). The filing also discloses Aurora's TCW credit line now fully drawn at $30 million (an extra $10 million drawn Sept 30, 2005), a new $7.5 million Northwestern Bank line (maturing Oct 15, 2006, with $3.7 million drawn so far) and a $2.95 million mortgage loan on an office condominium, with the Aurora executives personally guaranteeing the bank debts.

business combination

Cadence filed the registration statement (Form S-4) needed to issue up to 48,297,694 shares, of which 10,205,328 are issuable on option exercise, to Aurora Energy shareholders and option holders under the January 31, 2005 merger agreement. The last reported bid price was $2.53 on May 5, 2005. This is a step toward closing the merger; it is not yet effective and the merger has not closed. The text provided is truncated, so further terms are not covered here.

business combination

On January 31, 2005, the company (then filing as Cadence Resources Corporation) signed a merger agreement to acquire Aurora Energy Ltd. of Traverse City, Michigan, issuing two Cadence shares for each Aurora share; Aurora would become a wholly owned subsidiary. Alongside it, Cadence agreed to sell 7,810,000 shares and warrants for 14,050,000 shares (exercise price $1.75) to 22 investors for $9,762,500, including entities controlled by Nathan Low, a more than 10% holder. Cadence also repaid $5,000,000 of the $6,000,000 April 2004 notes in cash and converted $1,000,000 into stock and warrants, in exchange for cutting the exercise price on warrants for 765,000 shares from $4.00 to $1.25. Closing needs Aurora shareholder approval and an effective Form S-4. Note: Nathan Low's group had already been reported as a large holder in earlier filings.

business combination